HomeMy WebLinkAbout2007/07/24 Item 4
CITY COUNCIL
AGENDA STATEMENT
7/24/07, Item~
ITEM TITLE:
PUBLIC HEARING: CONSIDERATION OF A RESOLUTION
ACCEPTING AND AUTHORIZING THE SOLID WASTE AND
RECYCLING SERVICE RATE ADJUSTMENT FOR 2007-08 AND
SUBSEQUENT RATE ADJUSTMENTS FOR THE TERM OF THE
AMENDED AND RESTATED RECYCLING AND SOLID WASTE
FRANCHISE AGREEMENT
RESOLUTION ACCEPTING AND AUTHORIZING THE
SOLID WASTE AND RECYCLING SERVICE RATE ADJUSTMENT
FOR 2007-08 AND SUBSEQUENT RATE ADJUSTMENTS FOR THE
TERM OF THE AMENDED AND RESTATED RECYCLING AND SOLID
WASTE FRANCHISE AGREEMENT
DIRECTOR OF GENERA7f1.Wif}fES ~
CITY MANAGER V)---
ACTING ASSISTANT T MANAGER ST
SUBMITTED BY:
REVIEWED BY:
4/5THS VOTE: YES 0 NO ~
BACKGROUND
The City of Chula Vista has had a franchise agreement for solid waste and recycling services in place for
eight years. Per the terms and conditions of that agreement the contractor is entitled to an annual rate
adjustment. Thus, the issues of whether a rate adjustment is appropriate and if so, how much the
adjustment should be are not negotiable at this time. The adjustment formula has some very specific
limiting factors, which ensure that the ratepayers of Chula Vista will continue to have some of the lowest
rates for service in San Diego County.
However, due to a recent California Supreme Court ruling on Proposition 218 (July 24,2006, Bighorn-
Desert View Water Agency v. Beringson) refuse collection rates, when set by a government agency are
subject to the majority protest regulations within California Constitution, Article XIII D, Section 6. The
City Attorney's office has reviewed this proposed rate adjustment in light of Proposition 218
requirements and determined that refuse service rates are subject to the majority protest requirement that
includes a written notice to the recorded property owner of each parcel and a public hearing at least 45
days after the notice is mailed. Therefore, staff prepared the public notice which included the maximum
amount of the proposed fee, the basis for the calculation, the reason for the fee, and the time, date and
location of the public hearing. The fees cannot exceed the funds required to provide the service; shall not
be used for any purpose other than that for which the fee is imposed; shall not exceed the proportional
cost of the service attributable to the property; and the fee must be for service that is actually used by or
immediately available to the property owner.
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7/24/07, Item~
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On May 25, 2007 public notice was sent to all property owners of record in the City of Chula Vista
outlining the process for annual rate adjustments for General Service Rates for solid waste services as
defined in the Amended and Restated Solid Waste and Recycling Franchise Agreement. A copy of the
public notice has been included with this package.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed activity for compliance with the
California Environmental Quality Act (CEQA) and has determined that there is no possibility that the
activity may have a significant effect on the environment; therefore, pursuant to Section 15061(b)(3) of
the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is
necessary.
RECOMMENDATION
Conduct the public hearing and adopt the resolution accepting the rate adjustment calculation for 2007-08
and subsequent rate adjustments per the terms and conditions of the Amended and Restated Recycling
and Solid Waste Franchise Agreement and Proposition 218 requirements.
BOARDS/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
Per the Amended and Restated Solid Waste and Recycling Franchise Agreement the contractor is entitled
to an annual rate increase for General Service Rates within the following prescribed terms and conditions.
The City Manager or designee reviews the rates for compliance with these terms and conditions.
I. The annual adjustment amount does not exceed sixty-six and two-thirds percent (66.66%) of the
increase in the San Diego Area Consumer Price Index (Cpr) for all urban consumers (all items)
published by the U.S. Department of Labor, Bureau of Labor Statistics for the previous twelve-
month period (calendar year) for which statistics are available.
cpr for 2006 = 3.4% X 66.66% = 2.27%
2. Notwithstanding the foregoing, at no time shall the Small Quantity Generator Rates (SQG - cart
service) exceed ninety percent (90%) of the average for the County of San Diego for the same
level of service - approximately 60 gallon cart rate or standard service rate after subtracting any
pass-through fees or local subsidies. This limitation is to be applied only to determine whether
the Contractor is entitled to the full cpr adjustment on SQG rates, as described above. (Staff is
currently working through the rate survey comparison for 2007-08 and will ensure that the SQG
rates will comply with this limiting factor.)
Mean County Average X 90% = Maximum rate for SQG
Rate adjustments are effective annually on July I for Large Quantity Generators (commercial and
industrial bin service) and September I for all Small Quantity Generators (cart service customers). The
acceptance of this rate adjustment formula will be for the current fiscal year and subsequent rate
adjustments subject to the same terms and conditions as described above and in the Amended and
Restated Recycling and Solid Waste Franchise Agreement for the duration of the Agreement. Subsequent
rate adjustments do not require Council action and will be brought forward as information items.
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Basic Monthlv Rates with Prouosed AD 939 Fee and Pronosed cpr Rate Ad;ustment
Present Rates p, o osed Maximum Rates
32 Gal 64 Gal 96Ga! 3YDBin 32 Gal 64 Gal 96 Gal 3YDBin
Proposed
, 10,90 , 14.12 $ 16.60 $ 78.78 CPIAdj. 2.27% $ 11.16 $ 14.46 $ 16.98 $ 80.67
66.66% of
3.4%
Franchise 8.0'% S 0.87 $ 1.13 $ 1.33 , 6.30 8.0% $ 0.89 $ 1.16 $ 1.36 $ 6.45
F"
Proposed
AB939 Fee 2.5% , 0.27 $ 0.35 $ 0.42 , 1.97 AD 939 5.0'~o $ 0.56 $ 0.72 , 0.85 $ 4.03
Adi.
Prop 218
$ - $ - $ - , - Mailing $ 0.05 $ n05 , 0.05 $ 0.05
Costs
Total $ 12.04 $ 15.60 $ 18.35 $ 87.05 Total $ 12.66 $ 16.39 $ 19.24 $ 91.21
DECISION MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site specific
and consequently the 500 foot rule found in California Code of Regulations section I 8704.2(a)(I) is not
applicable to this decision.
FISCAL IMPACT
Acceptance of this rate adjustment and subsequent adjustments per the terms and conditions of the
Amended and Restated Solid Waste and Recycling Franchise Agreement will not impact the General
Fund.
ATTACHMENTS
Copy of Notice of Public Hearing
Prepared by: Lynn France, Environmental Services Program Manager, General Services Department
M:\General Services\GS Administration\Council Agenda\Environmental\Trash rate adj PH AIl3, 7.24-07.doc
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NOTICE OF PUBLIC HEARING
in Conformance with Article XIIID of the California State Constitution and the Proposition 218
Omnibus Implementation Act.
In compliance with Article XIIID of the California State Constitution and the Proposition 218 Omnibus
Implementation Act, the City of Chula Vista is hereby notifying all affected property owners of the
proposed AS 939 fee increase on all General Service Rates for Solid Waste and the annual rate
adjustment of General Service Rates for Solid Waste Services. Both rate adjustments are effective July
" 2007 for Large Quantity Generators (commercial and industrial bin service customers) and September
1, 2007 for all Small Quantity Generators (cart service customers).
PUBLIC HEARING INFORMATION
Public Hearings on these two items will be held on July 24, 2007, at 6:00 p.m. at 276 Fourth Avenue,
Chula Vista, California 91910 in the City Council Chambers. All protests on these items must be
s,tbmitted in writing to the City Clerk's office by 5:00 p.m. on July 24, 2007 and will also be accepted
it1 the Council Chambers at the respective public hearing. All written protests must be signed by the
~perty owner and contain a description of the property (address and/or Assessor Parcel Number).
At the Public Hearings, City Council will receive all final tabulation of all written protests received by
the City Clerk's Office and will accept additional written protests. The Council will then consider and
may adopt the proposed items.
Please send your written protest to:
City of (hula Vista, Office of the City Clerk
276 Fourth Ave, Chula Vista, CA 91910
Or fax to: (619) 585-5774
Protests sent by emaif will not be considered. All written protests must be signed by the property owner
and contain a description of the property (address and/or Assessor Parcel Number)
FREQUENTLY ASKED QUESTIONS
Why did I get this mailing?
This mailing serves as a notice for the proposed one time rate increase in the AS 939 fee, which is
collected on the solid waste services invoice. Additionally, this mailing also serves as notice for the
annual General Service Rate adjustment for Solid Waste Service Rates provided by a private Contractor
for the term of the Agreement.
Do I have to respond to this notice?
No, you do not have to respond to this notice. If, hoyvever, you feel strongly opposed to the fee increase
or the General Service Rate adjustment you can file your written protest with the City Clerk's office
as described in the section above.
What if I have more questions?
If you have questions about your waste services you may call 619 691-5122, or email the City at
Environmenta IServices@ci.chula-vista.ca.us.
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(HULA VISTA
NOTICE OF
PUBLIC HEARINGS
ON PROPOSED AB 939 FEE INCREASE
AND
SOLID WASTE GENERAL SERVICE RATE ADJUSTMENTS
July 24, 2007 · 6 p.m.
Council Chambers
Chula Vista City Hall . 276 Fourth Avenue, Chula Vista, CA 91910
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CHi'il'X'I'1srA
I 6NVrRDNM6NTAL..
S6RvrC6S ....
1800 Maxwell Road, Chula Vi5ta, CA 91911
EXPLANATION OF PROPOSED AB 939 FEE INCREASE
AS 939, known as the Waste Management Act of 1989, is a State law that requires cities and counties
to divert 50% of the waste going to the landfills. AS 939 was an unfunded State mandate, which
provided for jurisdictions to charge for the costs to develop, implement and administer programs and
services required to meet this goal.
Chula Vista's AS 939 fee is collected on the gross receipts for solid waste services by the contracted
hauler and forwarded to the City monthly. The fee is equitably distributed across commercial, industrial
and residential customers, based upon their level of trash service. An AS 939 fee increase from 2.5%
to 5% will generate an additional approximate amount of $450,000, totaling $900,000 annually and
would equate to the following on a monthly invoice;
. 32 gal cart =: an increase from $.27 to $.56 per month
. 64 gal cart =: an increase from $.35 to $.72 per month
. 96 gal cart =: an increase from $.42 to $.85 per month
.3 cubic yd commercial bin, serviced 1 time per week =: an increase from $1.97 to
$4.03 per month
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T~ funding received from the proposed increase would be used to:
. Offset the current funding shortfall in the Household Hazardous Waste Program
. Open the HHW facility one additional day during the week (as needed to meet the
volume demands)
. Provide several, one-day special events to collect batteries, fluorescent lamps and electronics
in different sections of the city
. Development, implementation and administration of the Construction and Demolition
Debris Recycling Ordinance
. Work towards increasing various recycling program documentation/reporting requirements
and associated administration
. Backyard composting program composting bins
. Commercial and industrial "Zero Waste - Stop Wa$ting Resources" Program technical
assistance and workshops
. Assisting in developing commercial food waste and organics recycling infrastructure
. Stricter enforcement of waste reduction and recycling requirements for Special Events
including after event reporting
AS 939 fees cannot exceed the funds required to provide the service; shall not be used for any purpose
other than that for which the fee is imposed; shall not exceed the proportional cost of the service attributable
to the property; and the fee must be for service that is actually used by or immediately available to the
property owner. If approved, the fee adjustment would take place at the annual rate adjustment date
for the respective customer service segments: large Quantity Generators (commercial and industrial
services) would go into effect July 1,2007; Small Quantity Generators (residential cart services) would
go into effect September 1, 2007. This is a one-time fee adjustment, not an annual fee adjustment.
EXPLANATION OF ANNUAL ADJUSTMENT
FOR SOLID WASTE GENERAL SERVICE RATES
General Service Rates for solid waste, recycling, yard waste and disposal are established annually. A
private contractor (Contractor) with an exclusive franchise agreement (Agreement) provides these
services in the City of Chula Vista. Under the terms and conditions of the Asreement, the Contractor
undertakes and ag~ees to coll~ct, .transfer, transport, recycle, process and dispose of all recyclables,
yard waste, and solid waste whICh IS generated and placed for collection by or upon all property located
within Chula Vista.
Per the Amended and Restated Recycling and Solid Waste Franchise Agreement, the Contractor is
entitled to an annual rate increase for General Service Rates within the folfowing prescribed terms and
conditions. The City Manager or designee reviews the rates for compliance with these terms.
. The annual adjustment amount for General Service Rates does not exceed sixty-six and two-thirds
percent (66.66%) of the increase in the San Diego Area Consumer Price Index (CPI) for all Urban
Consumers (all items) published by the U.S. Department of Labor, Bureau of labor Statistics for
the previous twelve-month period (calendar year) for which statistics are available.
(PI X 66.66% =: % of rate adjustment
. Notwithstanding the foregoing, at no time shall the Small Quantity Generator Rates (SQG _ cart
service) exceed ninety percent (90%) of the average for the County of San Diego for the same level
of service - approximately 60-gallon cart rate or standard service rate after subtracting any pass-
through fees or local subsidies. This limitation is to be applied only to determine whether the
Contractor is entitled to the full CPI adjustment on SQG rates, as described above.
Mean County Average X 90% = Maximum rate for SQG
Rate adjustments are effective July 1, for large Quantity Generators (commercial and industrial bin
service customers) and September 1, for all Small Quantity Generators (cart service customers), annually.
This mailing serves as notice for the proposed increase for 2007-08 and for subsequent annual rate
increases in the manner described above and in the Agreement with the Contractor for the duration
of the Agreement.
RASIC \10NTHl Y RATES WITH PROPOSED AR 939 FEE AND PROPOSED CPI RATE ADJUSTMENT
PRESENT RATES PROPOSED RATES
32 Gal 64 Gal 96 Gal ]yO Bin 32 Gal 64 Gal 96Ga! 3YD Bin
$10.90 $14.12 $16.60 $78.78 Proposed cpr: 2.27% $11.16 $14.46 $16.98 $80.67
(Adj. 66.66%
of 3.4%)
Franchise $0.87 $1.13 $1.33 $6.30 Franchise Fee 8.0% $0.89 $1.16 $1.36 $6.45
Fee 8.0%
AB 939 $0.27 $0.35 $0.42 $1.97 Proposed AB 939 $0.56 $0.72 $0.85 $4.03
Fee 2.5% Adjustment
~ Prop 218 Mailing Cost $0.05 $0.05 $0.05 $0.05
Total $12.04 $15.60 $18.35 $87.05 Total $12.66 $16.39 $19.24 $91.21
RESOLUTION NO. 2007-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA ACCEPTING AND AUTHORIZING THE
SOLID WASTE SERVICE RATE ADJUSTMENT FOR 2007-
2008 AND SUBSEQUENT RATE ADJUSTMENTS FOR THE
TERM OF THE AMENDED AND REST A TED RECYCLING
AND SOLID WASTE FRANCHISE AGREEMENT
WHEREAS, the City of Chula Vista entered into a franchise agreement [Agreement] for
Solid Waste Services with Allied Waste Services (formally Pacific Waste Services) in July 1999;
and
WHEREAS, the Agreement contains specific language and formulas for calculating
annual rate adjustments, which includes limitations that ensure the Chula Vista ratepayers will
continue to have some of the lowest rates for service in San Diego County; and
WHEREAS, the California Constitution, Article XIII D, Section 6 (Proposition 218)
requires a public hearing and property owner notification which includes: the maximum amount
of the fee, the basis for the calculation, the reason for the fee and that the fee be only for the cost
of service and used only for the purpose for which it is collected; and
WHEREAS, the City Council has conducted the public hearing per State regulations.
NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby accept and authorize the rate adjustment calculation for 2007-2008 and
subsequent rate adjustments per the terms and conditions of the Amended and Restated
Recycling and Solid Waste Franchise Agreement.
Presented by
Approved as to form by
Jack Griffin
Director of General Services
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Ann Moore
City Attorney
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